To Pivot, Or Not To Pivot

Alan Cooper

April 27, 2010

At the recent Startup Lessons Learned conference in San Francisco I learned a new buzzword for a very old concept. When a startup company discards Plan A and moves on to Plan B, it is called a “pivot.”

Pivoting has some nuanced meaning that differentiates it from simply changing directions. Pivoting is a seek-the-light strategy and it is not seen as fixing a problem. What you were doing might have been good, but what you pivot to do will be better. In fact, a startup that doesn’t pivot can be suspected of rigidity.

When I started my first company way back in 1975, I did contract programming. That lasted less than six months when I pivoted to building turnkey accounting systems. Before I had delivered my first (and only) turnkey accounting system, I had pivoted to just selling the software without the system. Each new business model was better than the last.

When a mature company changes its business model, there are costs associated with it, not the least of which is the dislocation to its people, who were probably very comfortable doing what they used to do. In a small, young startup, the costs are insignificant, and there are few if any extra, comfortable people to be dislocated.

Some people have expressed their doubts about the methods espoused at the SLL conference, and some are surprised to find me enthusiastic about them. But it’s important to understand that it isn’t a one-size-fits-all world. In a four-person web startup it isn’t unreasonable to pivot once a month. In a four-thousand-person mid-size manufacturing company it is insane. Just because methods work, it doesn’t mean that they work everywhere.

Overall, the SLL conference wasn’t so much about entrepreneuring as it was a celebration of today’s incredible web-based entrepreneuring environment. The barriers to entry today are so low that they approach zero.

When the cost to play the startup game is next to nothing, the cost of making mistakes is tiny, too, as is the cost to pivot. Therefore, there is little pressure to be correct or even to have a good idea. You can just keep having and trying ideas at little or no cost, and eventually one of them will be good enough for you to build a business. You can pivot your way to success instead of tediously crafting your way there.

The interesting point to ponder is whether this current web-based startup environment will be around more than a couple of years. Is it a brief anomaly, or is it the new business-as-usual? And should you be pivoting towards it? Should I?